New Living Wage divides opinion

Madama Butterfly

The Government’s National Living Wage scheme came into effect last Friday and sets a new rate of £7.20 an hour for employees over 25.

It increases existing national minimum pay by 50p, meaning around £900 a-year extra for full-time employees.

But one Tonbridge Company already pays a higher hourly rate after it became one of the first in Kent to sign up to a voluntary scheme two years ago.

Patrick Crawford, chief executive of the Charity Bank, agreed to the Living Wage Foundation’s terms of paying employees aged 18 and over an enhanced minimum rate of £8.25 because he felt it ‘was the right thing to do’.

The Government’s own National Living Wage scheme has been met with widespread criticism from small businesses who say it will affect their ability to stay in profit and so could mean them taking on less staff.

Mr Crawford disagrees and points out that 80% of the companies which have adopted the Living Wage Foundation’s higher figure have seen enhanced employee productivity and reduced absenteeism.

Mr Crawford said: “We joined the Living Wage two years ago as we felt it was the right thing to do in terms of its benefits of retention and recruitment of staff, as well as encouraging greater productivity within the workforce.”

Despite his enthusiasm for the scheme he does concede there could be a greater strain placed upon some smaller firms in terms of their ability to meet higher staff wage bills.

According to research from the Federation of Small Businesses (FSB), a total of 38% of firms nationally were worried about the implication of rising wage costs.

Mike Cherry, FSB National Chairman, reflected concerns over the new legally binding wage increase.

He said: “Small businesses are playing their part by creating jobs and boosting pay packets wherever they can. Our research suggests that over half of small firms already pay their staff more than the voluntary Living Wage, but those that don’t are often operating in highly competitive sectors with very tight margins.

“While it is easy to say everyone deserves a pay rise, the only way to deliver and sustain higher wages in the long run is to improve productivity, drive business growth and boost skills.”

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